Outsourcing

By the time you read this, there could be a major battle brewing between United Airlines on one side and their 4,500 or so technicians and their union and the City of San Francisco on the other. News reports noted that United may have plans to outsource most, if not all, of the jobs at its facility in San Francisco and lay off or transfer most of the SFO employees. They might sell the whole facility. The mayor of San Francisco has joined the fray in an attempt to stop this from happening. Other politicians have also chimed in.

Mayor Gavin Newsom held a press conference with the leaders of the Teamsters Union on the steps of City Hall on March 5 in order to protest United’s planned actions. Of interest is the fact that the Teamsters do not represent the employees. Teamsters do not represent any of the affected employees of United. The union that does represent them is the AMFA, Aircraft Mechanics Fraternal Association. They were not invited to participate in this meeting. Since there is an ongoing challenge by the Teamsters for representation, one has to wonder about the motives of the mayor and the Teamsters. (United Airlines mechanics overwhelmingly chose the Teamsters Union as their collective bargaining representative by a vote of 4,113 - 2,631, the National Mediation Board announced March 31.)

United history
United closed its maintenance facility in Indianapolis some years ago without so much as a whimper from most quarters. This occurred roughly at the same time that the Postal Service abandoned its mail sort center to FedEx and laid off hundreds of Postal Service employees who worked there. Indianapolis was severely impacted at that time. Little was done to save the approximately 2,000 jobs at United.

It will be different in San Francisco. There is even talk of lawsuits and injunctions. United will have a major fight on its hands, to say the least.

San Francisco is different from Indianapolis. It is one of the oldest and largest of United’s facilities and the flagship location, next to Denver, for this legacy airline company. United recently completed a successful bankruptcy proceeding and is obviously continuing its efforts to save money wherever it can.

According to reports, United outsources 45 percent of its maintenance to foreign repair facilities. We do not have a figure on the number of noncertificated shops that are used. This figure keeps rising because of the substantial difference in costs. Most outsourcing can be accomplished with more than a 50 percent reduction in cost. (Probably more in the case of noncertificated shops.) The figures at airlines have been rising every year. Delta, for example, spent $272 million on outsourced work in 2004, an amount which was raised to $467 million by 2006. The question always remains: what is the real cost in safety compromise for sending this work to foreign facilities?

FAA oversight limited
As we all know, our FAA is severely limited in its supervision of foreign maintenance facilities. Both certificated and noncertificated repair locations are used by our air carriers. There is little oversight of both certificated and noncertificated overseas maintenance facilities. Furthermore, things like drug testing and background checks are virtually nonexistent overseas. Our Transportation Security Administration recently reported about a senior technician who belonged to Al Qaeda and was found at a shop in Singapore photographing U.S. aircraft as potential targets. Security consultants have said that such people could easily bury weapons inside doors or fuselages for further use.

Late last year Congress introduced new requirements for foreign repair stations which are included in the FAA Reauthorization Bill by amendment (HR 2881 amd.(3)). To date, however, the bill has only been passed in the House and sent to the Senate. Some of the problems addressed involve such things as drug and alcohol testing and background checks as a requirement for employment. Believe it or not, in most European Union countries these tests are illegal and prohibited due to privacy and anti-discrimination laws. In addition, the EU and FAA have been negotiating a bilateral aviation safety agreement that delegates the FAA oversight and inspection function of EU Part 145 repair stations to the EU (EASA) organization. We will have given up the oversight function in those countries to the EU, even though they work on U.S.-registered aircraft. However, this agreement is not yet fully implemented.

Quality control?
True, the number of licensed overseas repair shops has more than doubled since 1994. However, our FAA just does not have the personnel to keep tabs on the quality of work produced by all these locations. Many repair facilities used by our air carriers are not certificated or routinely inspected by the FAA. If the traveling public were aware of the use of noncertificated repair facilities there would be a outcry regarding ... what price safety? In the past, these noncertificated shops were used for minor maintenance jobs and were only used to perform significant work in emergencies. This is not the situation today. It is reported by the Department of Transportation that many now perform scheduled maintenance critical to the airworthiness to the aircraft.

Having noncertificated facilities (overseas) performing critical maintenance is an important issue for FAA to consider. These shops are not required to have system quality control features and oversight that are required for airline operations and certificated facilities. They are not required to have inspectors or supervisors. The only requirement is that a single FAA-licensed mechanic signs off on the work of many non-licensed mechanics. Remember, the low bidder usually gets the work!

Relevant home front news
On the home front, just recently our FAA was rebuked in Congress by Rep. James Oberstar (D-MN, and Chairman of the Transportation Committee) for failing to give proper inspection oversight to Southwest Airlines, one of our major air carriers. Oberstar reported that Southwest was allowed to fly past mandatory deadlines with serious safety violations in 46 of its aircraft. These violations included failure to perform Airworthiness Directives. (Remember, failure to perform ADs can be a crime!) In all fairness to SWA, it did disclose the problems to FAA personnel and FAA had knowledge of the problems but allowed it to continue to operate the aircraft under an agreement. The LOI (letter of investigation) seeks $10 million in civil penalties (fines). The irate Congressman stated further that, ”FAA needs to clean house from top to bottom … They need to hire new inspectors. They need to give them a safety mission. They need to install a new safety compliance attitude among their inspection workforce.”

The point here is that Oberstar seems to say that the FAA can’t handle the serious oversight problems right here at home, never mind at overseas maintenance facilities. Therefore, why are we allowing work to go overseas where there is less or nonexistent oversight inspections by the FAA?

Stephen P. Prentice is an attorney whose practice involves FAA-NTSB issues. He has an A&P certificate, is an ATP rated pilot, and a USAF veteran. Please send your comments or suggestions to aerolaw@att.net.